We examined the impact of winner and loser effects on dominance hierarchy formation when individuals are capable of estimating their opponent's resource holding power (RHP). The accuracy of such estimates was a variable in our simulations, and we considered cases in which all individuals err within the same bounds, as well as cases in which some individuals consistently overestimate, while others consistently underestimate their opponent's fighting RHP. In all cases, we found a clearly defined linear hierarchy. In most simulations, the vast majority of interactions were 'attack-retreats', and the remainder of interactions were almost all 'fights'. Error rates had no effect on the linearity of the hierarchy or the basic attack-retreat nature of interactions, and consistent over and underestimation did not affect the ultimate position of an individual in a hierarchy.